In the Open-Economy Macroeconomic Model,if the Supply of Loanable Funds

question 30

Multiple Choice

In the open-economy macroeconomic model,if the supply of loanable funds shifts right,then

• A)net capital outflow increases so the demand for dollars in the market for foreign-currency exchange shifts right.
• B)net capital outflow increases so the supply of dollars in the market for foreign-currency exchange shifts right.
• C)net capital outflow decreases so the demand for dollars in the market for foreign-currency exchange shifts left.
• D)net capital outflow decreases so the supply of dollars in the market for foreign-currency exchange shifts right.

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Definitions:

Accounting Profits

Accounting profits represent the financial gains of a business as calculated by subtracting total explicit costs from total revenues, according to standard accounting practices.

Industry Entry

The act or process of starting a new business or expanding into a new segment within a particular market or industry.

Average Product

The total output produced by a firm divided by the number of inputs used to produce that output.